STORY HIGHLIGHTS

China, Israel entering FTA talks

CNC

Added On June 20, 2015

One of the economic news highlights for China this week is the signing of a free trade agreement with Australia on Wednesday. And that brings the total number of such documents China has signed to 14, involving 22 countries or regions.

China is undertaking to construct a network of Free Trade Zones, particularly in its neighborhood and along the One Belt One Road route.

And more countries are sitting down with China, discussing free trade deals.

One of them is Israel, which is our topic today.

This March, Chinese Ministry of Commerce announced that China would kick off negotiations on a proposed FTA with Israel this year.

The ministry’s spokesman Shen Danyang said Israel is one of China's major economic and trade partners in the Middle East and along the route of China-proposed "belt and road" initiative.

Shen said China and Israel have completed a feasibility study of the FTA "with a positive outlook," adding that it will lift bilateral cooperation to a new height.

Matan Vilnai, the current Ambassador of Israel to China, told CNC in an exclusive interview that an FTA deal with China is of special significance for his country.

SOUNDBITE (ENGLISH) Matan Vilnai, Ambassador of Israel to China:

"Asia became in many aspects the center of the world. When I am saying Asia, mainly China. And we have no agreement in China, not an agreement in Asia at all. When we have one in China, it will be the first one and it is important.”

As the two sides are starting the negotiations, it may be too early to get many details.

But the ambassador pointed out that the two economies are highly complementary to each other.

SOUNDBITE (ENGLISH) Matan Vilnai，Ambassador of Israel to China:

"We are not competitors. We are complementary to each other. This is the most important thing. We support each other complementarily: the user market of China, and the Israel’s technology, working together, in the end, part of the technology will be part of China, of Chinese economy. ”

Xing Houyuan is the vice president of Chinese Academy of International Trade and Economic Cooperation (CAITEC), an inter-disciplinary institution of China’s Ministry of Commerce.

As an expert engaging in the research on subjects of economic cooperation and international trade in services for decades, she pointed out the two countries own huge cooperation potential in various industries.

SOUNDBITE (CHINESE) XING HOUYUAN, Vice President of CAITEC

"It seems that the economies of China and Israel do not quite match each other in terms of size. In fact, their economic cooperation features high complimentarity. Israel's development relies on top-notch technology. For example, its agriculture is remarkable. The dripping irrigation technology alone suits well the water-saving projects in China's northern, central and western regions. Israel also needs China, like its manufacturing capacity. The two countries do have a very solid foundation in trade and investment.”

Ambassador Vilnai echoed Xing's comments on the direction the negotiations would go.

SOUNDBITE (ENGLISH) Matan Vilnai，Ambassador of Israel to China"

“I can say where it is going. It is going to be more on agriculture, on water, technology and healthcare. We have just started the discussion on healthcare. It is very important to help you together to improve you healthcare system in China. We have a lot of technologies in these two. And I believe these will be the main subjects after the FTA will be operational.”

No FTA talks are free of challenges.

SOUNDBITE (ENGLISH) Matan Vilnai，the Ambassador of Israel to China: “To act in China is a Challenge. To have cooperation with China is a challenge because China is a super power. Although you prefer that you are not a super power, you are a super power. And China, for our point of view, is not a state, is not a country. China is a continent. And to work in China is a challenge for us at early, to have something with Chinese together is a challenge for each of us. And the topic we are going to discuss and we are going to cooperate on the topics that I have mentioned like technology, agriculture and healthcare. And these are the main issues we are going to work with China, mostly with the provinces because China is a state that is too big for us and provinces can be something we can understand.”

SOUNDBITE (CHINESE) XING HOUYUAN, Vice President of CAITEC

"The negotiation is about market openness after all. The final result will depend on the balancing of each sides' concerns and mutual accommodation. I'm looking forward to seeing a deal reached at an early date."

The bilateral trade has increased notably since the two countries established diplomatic ties in 1992.

According to data by the Chinese customs, bilateral trade volumes stood at 10.8 billion U.S. dollars in 2014. That makes China Israel's second largest trade partner and the largest in Asia.

The Chinese government considers FTAs as an effective approach to integrate into the global economy and strengthen economic cooperation with other economies.